Press Release

2018-04-27

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2018-04-27
Mori Building Co., Ltd.

Survey of Large-scale Office Building Market in Tokyo's 23 Wards

Since 1986, Mori Building Co., Ltd. (Minato-ku, Tokyo; President & CEO Shingo Tsuji) has regularly conducted market surveys of supply and demand trends for 10,000㎡-class or higher office buildings that were constructed in Tokyo's 23 Wards since 1986 (hereinafter referred to as "large-scale office buildings"). Through a diverse analysis of the results of this survey, we are also able to develop forecasts of future office market trends. We are pleased to present you with the results of our survey in the following report.

General Trends in Supply Volume
- Supply volume for the next 5 years is expected to be on par with the average of past years -

■The supply of large-scale office buildings in Tokyo's 23 wards will increase in 2018 and 2020, but supply volume in 2021 and 2022 will be notably lower, with the average over the next 5 years (2018 to 2022) expected to be approximately the same level as the average for the past 25 years. In addition, the average amount supplied per property is increasing every year, and the supply volume of large-scale office buildings of 100,000 sqm or more is expected to be the largest in 2020, as the amount of "large scale supply" continues to trend upwards.
■By area, the tendency of large-scale office buildings to be centralized in the city continues, with approximately 70% of the supply over the next 5 years being in the Central 3 Wards. In addition, from 2018 to 2022, approximately 70% of the supply will be concentrated in the 5 primary areas of "Marunouchi and Otemachi", "Nihombashi and Yaesu", "Shibaura, Kaigan area, and Hamamatsucho", "Shimbashi and Toranomon" and "Shibuya".

General Trends in Demand - Demand for office space to remain largely steady -
■Approximately 60% of companies that intend to lease new office space are doing so to expand current floor space, and the number of workers in the future is expected to continue increasing, causing demand for office space to remain largely steady. In addition, the key reasons for planning to lease new office space were 'to expand business or to accommodate an increase in employees', 'wanting to move to a better location', and 'wanting more floor space per floor', further demonstrating the trend of large office buildings being centralized in the city.

Vacancy rate
- Vacancy rate to improve under the back ground of vigorous demand for offices -

■The vacancy rate at the end of 2017 improved to 2.6%, and although supply volumes will be high at the end of 2018, the vacancy rate is expected to remain almost flat due to robust office demand. By the end of 2019, we anticipate that it will improve to 2.5% due to reduced supply and strong demand for office space.

Please refer to the PDF file for more information.

Please address inquires regarding this press release to:

Mr. Shinji Takeda, Mr. Satoshi Hasegawa or Mr. Masayuki Fujimoto, Strategic Planning Unit, Office Business Department, Mori Building Co., Ltd.

Location Roppongi Hills Mori Tower, 6-10-1 Roppongi, Minato-ku, Tokyo 106-6155, Japan
Tel 03-6406-6672

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